Creating a successful business plan
A business plan will increase your chances of securing funds. A business plan tells what you plan to do and how you want to do. A good business plan not only secures funding for you, but also attracts employees and new clients. Companies that have a business plan often have higher growth rates.
- First, it’ll be hard for you to raise money from anyone without a business plan. Different types of investors, which we’ll discuss shortly, will need to see financial projections before they even consider giving you a dime.
- This plan will also set you up for success.
- Once you get into the daily grind of your business operations, you’ll always have your plan as a reference to remind you how to proceed.
- You may forget some ideas a year or two down the road if you don’t have everything in writing.
Your business plan should have a clear description of your business.
- Who are you?
- What do you do?
- Your basic business concept
- Your business strategy and action plan to implement it
- It should also include a market analysis.
- This will discuss information and research about your competitors as well as your target market.
- You’ll also want to outline the organizational structure of your company.
- Have clearly defined roles for managers and other positions within your organization.
Arguably the most important part of a business plan is the financials.
- Do your best to include financial projections for the next three to five years:
- Make sure your projections are realistic.
- You don’t need to turn a profit on your first day or even your first year.
- Just try your best to accurately predict your finances.
- This section of the business plan will help you secure funding from other sources on our list as well.
- The key financial aspects that investors look at may include rates of return, cashing out options, IPO, chances of being acquired etc
Things to avoid in your business plan.
- Avoid possible disclosure of confidential matters thinking that it makes you trustworthy. It could ruin your business
- Avoid over-optimism, exaggerations or consciously including false information
- Avoid too much detail and try to explain things in a simple language
- Make sure that numbers add up, your data is genuine and verifiable
- Despite the effort and thought that goes into a business plan, it isn’t perfect. There may be still a few things that you can improve or the external conditions may have changed after you created your business plan. Make room for such fluctuations and scenarios.
The Executive Summary
This is often the most crucial part of any business plan. It’s not just the summary of your total business plan; you can use it effectively to
- Grab attention towards your best features and strong points
- The executive summary is often the first thing that many busy investors start reading in a business plan. Please highlight the most exciting and important parts of your business or product in your summary
- Mention milestones achieved, tie-ups and sales numbers if they can create an impact. You need not include not-so-good numbers and risk factors.
- Include your plans and goals, briefly. Give some information about the most crucial benefit that your product or service provides to the customers and how you were able to create such a solution.
There is a lot to business plans than what I wrote here. Take the above as guidelines, not as a blueprint. It all depends on your business niche and your business goals. There are a lot of sample business plans available on the web, you can just take a look at them and start.